What’s In A Publishing Agreement?

When publishing with a POD company you should look beyond the marketing materials and read the Author Agreement/Publishing Contract, to find out what exactly the deal is. While some companies, like Booklocker, have managed to keep the language simple and direct…

We don’t work with Jerks
We’ll bend over backwards to help authors get published…but we don’t like working with jerks. Life’s too short…So if you are a jerk please go work with one of our competitors

…most companies have let their lawyers go to town on the agreement:

Rights and Guarantees
Whereas, the AUTHOR wishes to publish his/her works (hereinafter to be refferred to…

Having had to revise one of these a couple of times, to try to make it more user friendly, I thought I’d share my the fruits of my translation effort with you.

disclaimer
Please remember I am not a lawyer and that this article is intended to educate you but not replace the advice of a legal professional.
end disclaimer

A publishing agreement from a POD firm normally contains information on four or five things:

Rights and exclusivity

Pricing and royalties

Warranties and Indemnities

Termination clause

The actual services they will provide.

Rights & Exclusivity

Most POD companies take only a non-exclusive right to produce and distribute your book. This means you grant them the right to make and sell your book but you can also produce the book any way you want at the same time. You can list it with two POD companies, you can do your own printing, sell subsidiary rights to a bookclub and keep all the money yourself, or declaim it from the roof of your house.

This is quite revolutionary and not all POD companies follow this model. Traditionally, publishers invested a lot of time in editing, book production, printing and marketing, so they expected the author to allow them the exclusive right to produce the book. POD firms, however, are more like book packagers or printers – you are buying services from them. Why should they get your rights? It’s a good question and I’m glad some of the POD pioneers thought of it.

You are unlikely to see a deal like this from a traditional publisher – at least, not yet.

If a POD publisher is taking an exclusive right be sure you know

How long the term lasts,

How and when it renews

How much notice they need to give the rights back to you.

This is important because if Simon & Schuster comes knocking, looking to pick up your book and you still have a year left on your contract with the POD firm, you might have to share the money with the POD company, or risk the publisher getting bored and moving on to the next project.

Pricing and Royalties

Probably dearest to your heart of any matters in the publishing agreement is the question of money – how much will they pay you?

The agreement should spell this out clearly. Now ‘clearly’ doesn’t mean ‘simply’ because royalties are a complicated topic, but it should be there.

Firstly, you should be able to see how much they are going to charge for your book, whether or not you have any say in that pricing, and whether or not they have to ask your permission before changing the prices. Because POD books are supposed to stay in print forever, and because there are so many authors to deal with, many agreements will reserve the right to change the price as production costs and other factors change.

This isn’t outrageous when you consider that your book should still be available long after you’ve shuffled off, as Shakespeare put it. Industry standard prices and the costs of production are bound to change over time and the company doesn’t want to have to poll each of it’s 10,000 authors every time they adjust the prices to meet current standards.

If they offer you the chance to set your own price, be sure you understand their minimums and how your decision to raise or lower the price will affect your receipts.

Ah yes, the receipts.

Some POD companies offer a percentage of the list price. This is nice and easy, because you always know what the list price is and you can know exactly how much you will make on any sale, regardless of bookstore discounts or production costs. The problem with expressing it this way is that the percentage sounds lower than if the company offered a percentage of net receipts, or purchase price.

If a company offers a percentage of list price, that percentage is probably in the region of 25-40%. (Remember that traditional publishing royalties are around 6-10% of list price). If they offer a percentage of the net-receipts or the purchase price, that figure could be anywhere from 40-70%. As exciting as that sounds, it is important to remember that this means you get 40-70% of the POD company’s receipts, after they’ve given the bookstore their 40% discount. A sale of a $12 book could result in a $2.88 royalty even if the agreement says ‘40%’, which seems like it should come out to a lot more. This is because you get 40% of the profit the POD company receives, not 40% of the price of the book.

Services

There should be some description of the services you are buying – either as part of the contract or as an attached document/schedule. Make sure you read these carefully to know what exactly you are and aren’t getting.

Warranties & Indemnities

Possibly the most brain-frying portions of any agreement, these sections tell you what you are responsible for (everything) and what the company will take responsibility for (nothing). Language like “Author represents and warrants the following…” is usually followed by any number of clauses saying you promise that you are the real author, you own the copyright, that you haven’t promised anyone else an exclusive license to the work; that you haven’t included anything illegal, defamatory or that would infringe someone else’s copyright or trademark.

If you an honest operator, this section contains nothing very scary. However it does mean that if you accidentally defame someone and they take you and the POD company to court, the POD company can hold up its hands and say ‘not our fault, the author promised it was OK’.

Likewise the indemnity portion is full of clauses saying you won’t hold the company responsible for anything: basically, if you get sued for any reason, you’re on your own.

Knowing this, you may wish to purchase publisher’s liability insurance from a third party if you are writing about real people or events.

Termination

The agreement should give the terms under which you or the company can end your relationship. It should include timelines, if appropriate; the procedure for notifying each other and, ideally, some indication of what they will do with any extra copies of your book that they may happen to have lying around.

Usually, if you don’t give up any rights, you can terminate the agreement at any time. If you’re giving up rights and want to break the agreement, the company will probably retain the right to produce and distribute the book for some time after you notify them.

Conclusion

POD contracts tend to be a lot more generous in terms of rights and royalties than traditional publishing contracts … but that’s just how it should be, since the POD company makes non of the investments made by a traditional publisher.

If your agreement seems too legalistic for you to understand, take it to an intellectual property lawyer for their advice. It is important to know exactly what you are getting into. There is no one model for POD, there is not, as yet, any gold standard.